Company overview of Indian coffee business

family overview of Indian umber affairThis case study analyses and discusses the Indian keep company Caf coffee bean mean solar day, its market placeing Mix and gate like a shotion to the UK. My query aims to explore the caf coffee days background, securities industrying mix, and the success strategies in India in addition to various kinds of area(prenominal) environsal chemical elements and mart entry mode to enter in the UK market. The questions of why and how to enter in the UK market are illustrated with different market entry modes. It is found that the UK market is ease to enter for business. I compared the companys marketing mix and UKs marketing environment. I presented some recommendation to the successful Indian presidency except minimal international experience for building its charisma in the UK.This case study is illustrates a trusted and healthful known coffee ho utilise brand Caf coffee Day, and how it is possible for this to venture into one of th e largest economy in the European zone , The United demesne. This case study describes the various marketing mix of this organization, the marketing environment of UK and the possible entry modes.Caf Coffee Day in IndiaCaf Coffee Day (CCD) is one of the well realized company and heart throb of early dayss in India. The headquarter is situated in Chikkamagaluru, Karnataka its a division of Amalgamated covered stadium Coffee Trading Company Ltd. CCD opened its first cafe in the year 1996 on the soci ally frequented area called Brigade Road which is located in the heart of Bangalore, now it has be serve the freehandedgest retail graze of cafs in India, having more than 1000 cafes in 141 cities. Caf Coffee Day stands out as a unique brand in India and has managed to achieve the tag of Most Trusted Brand ranking itself as second in a survey for food services conducted in 2008. Nowadays CCD plans to pretend big global chain by 2012-2013(Caf Coffee Day Official website 2010).While expanding the business in India, CCDs marketing strategy is to open a caf near to educational institution and corporate campuses. CCD already started to explore European market they made their present to open coffee shops in Vienna. Caf coffee day is having various kinds of formats depending on the target audience.Caf Coffee Day TriviaCDocuments and SettingsRanjeetDesktopccd_table1.JPG (Source website CCD Coffee Day website 2010)Caf Coffee Day FormatsCDocuments and SettingsRanjeetDesktopccd_table2.JPG(Source website CCD Coffee Day website 2010)United KingdomUnited Kingdom has the sixth largest economy in the world and stands tall in list of developed countries in the European Union. UK is the home of world famous education institutes and corporate houses. Central Intelligence Agencys cites that the population of UK is 62,348,447 (July 2010), and the real GDP of the country is -5% (2009 est.). The annual report of globe Bank declared that United Kingdom is ranked 4 out of 183 eco nomies for ease of doing business. While choosing the UK market Caf Coffee Day take aways to analysis the international marketing environments (CIA world factbook 2010).International Market surroundingsBrassington Pettit, (2006) argues while taking the decision to pursue international development, the company has to investigate following environmental factors.Socio pagan purlieuCultural factorsLanguage FactorsThe UK population speaks various languages check to the region, Although English is the national language only CCD postulate to lease Scot, Scot Gaelic, Welsh, Irish and Cornish languages as well.ReligionCIA world factbook categorized religions in The UK (2001 census)(Source CIA FactBook Website) accessible factorsDemographic factors and lifestyle plays very great government agency. According to MSI various sectors of the disruptive food market pull in to different age groups as a result the age profile of the UK population is signifi stomacht factor affecting the demand. The urbanization of UK population is 0.5% the annual rate of change from 2005-10 and in year 2010 the population harvest-tide rate is 0.563 % (CIA World factbook).Legal EnvironmentThe UK legal system has early influences of roman and modern Continental practices of law has guidelines for the Acts of Parliament under the Human Rights Act of 1998 which have a non binding review of discriminative nature accepts compulsory ICJ jurisdiction with reservations (CIA World factbook)International LawsThe United Kingdom comes under European countrys laws and regulations, and Indian and UK participation organization desire IFC, ICC etc.Technological EnvironmentThe UK is technologically advanced than the India and having wide range of internet, telephone, and mobile network.Economic EnvironmentThe UK is a leading trading power and financial centre. In India CCD does non have any rules of minimum wages but while entering in United Kingdom, Company needs to give consideration to minim um wage rule, fanfare rate, unemployment rate and household income .Political EnvironmentPolitical and legal factors plays an imperative role in this industry, these factors sets the rule of competition, operational cost and wages. Following points should consider while entering in the UK.Operational restrictionsDiscriminatory restrictionPhysical actionsMarketing Mix of Caf Coffee DayThe age old marketing mix, consisting of the 4Ps i.e1.Product2. set3. Place4. PromotionHowever CCD offering infrastructure, facilities, staffs, and the process from monastic order the harvest-time to delivering it. This is the reason shakes us to consider concourse, Physical evidence and Process (Brassington Pettit, 2006, P. 1063).ProductsFood(Source prescribed website of CCD)Beverages(Source official website of CCD)Caf Coffee Day is offering various ranges of products, some of them already exist in UK market. The Caf Coffee Day adopts a product managing hindsight to distinguish each of its uniqu e cafe which are exhibited under an umbrella of products and those batch be different as per the location. For example we stomach introduce Masala Chai and Kashmiri Qahwah to Indian populated area.PriceWhile considering the price mix for UK market, CCD needs to consider various factors which open fire play the vital role to influence the pricing strategy.Factors Affects on the Pricing StrategyCompany and Product factorsCorporate and Marketing objectivesThe condensed term tactical use of pricing such as discounts, product offers, ex. McDonalds use Big mac with fries and CokeFirm and Product positioningAvailable resourcesMarketing and Product developmentMarket FactorsConsumers perception of the product, associated expectations and the average spending abilityIdentifying the objectives of the existing, their upcomingstrategies and unqiue interchange pointEnvironmental FactorsGovernment influences and constraintsLevel of inflationCaf coffee day shtup apply a variety of strategies , combination of affordable prices and understand consumers need in addition to estimate the competition from the major companies alike Starbucks and Costa Coffee and their strength and helplessness as well. Business in the UK is governed by Government regulations and inflation plays an important role running them. It is important for CCD to analyze all the important factors which i have mentioned above to integrate and coordinate pricing policies to go up in the UK (Doole Lowe, 2008, P. 383-4).PlaceStrategic locations of the outlets help to attract the target market by means of which Caf Coffee day is sustaining its business, for ex. in India their outlets are commonly situated near to family entertainment sums, educational institutes and high route. CCD bed apply the same strategy in addition to it can open the outlets in city center and near to corporate offices.PromotionCaf Coffee Day use promotion mix in India like ties up with youth brand Levies and association in movie s except as a new company in the UK it needs to go with more options of promotions. The customer is or so likely to build his/her expectations by prehension the communication messages marketing the service a business service is likely to deliver (Brassington Pettit, 2006, P. 1069). The Promotion criteria use a variety of communication and motivation techniques with adequate emphasis on the need to generate peculiarity which ultimately helps the customer purchase the new product with trust (Lilly Walters1997).Following possible channels of publicizing can aid CCD to realize its existence in the market.T.V.RadioPrint advertisingInternet Advertising sales Promotion (Student Concession)PeopleThe nature of Services provided depends on the various interactions between people, including Caf Coffee geezerhood staff and the regular customer. The staff plays vital role to deliver the quality service, people in CCD knows People are hired for what they know but fired for how they behave. Caf Coffee Day believes that staff is the real face up of any company so they can stress on intensive staff training to lintel with customers.Physical evidenceBrassington Pettit have mentioned Physical evidence comprises the tangible elements that support the service delivery, and offer clues around the positioning of the service product or give the customer something solid to take away with them to symbolized the intangible asset benefit they have received(2006, P.1070). Caf Coffee Day is well aware about the physical evidences it can be categorized byBrand Image, Logo Caf Coffee Day logo has bright red and fleeceable tinge which gives it a distinct appeal. Red color represents leadership, vitality and the zest for drinking coffee, whereas the strokes in green instantiates the heritage of producing coffeeArchitecture and Dcor Caf Coffee Day is using lots of young color of today like limegreen, yellow, orange and purple and lots of steel instead of wood.Literature A youth re presentative image is indicated by the literature provided by Caf Coffee Day. Thecolorful hardbound menus, placards, leaflets are all designed o appeal the younger generation who are able to emphasize with it.ProcessesIn India former Caf Coffee Day opted on self serving system but nowadays in most of the outlets the waiter comes and takes away the order and delivers it to the particular table. While considering the UK market it can be vary according to the location for an example CCD can choose to go with self service with an outlet on Sauchihall street in Glasgow to alleviate the service provision in heavy rush and to avoid the appointment of an extra staff for servicing, thereby saving cost in process execution.Entry Mode to United KingdomOnce the company decided to enter in the UK market, it must evaluate various options on how to prepare an entry into the market. Different factors influence the choice of entry into the market. Brassington Pettit (2006, P.1131-2) state six ma in factors are as belowSpeed How quickly a company wants to penetrate into a market?Cost How oft condemnations is the initial enthronization required to enter into the UK market?Flexibility How flexible is the company to adapt to the requirements of the ever-changing market?Risk factors Competitive and Political riskPayback period The pressure from within the organization to produce a quick return on any outside market investment How fast the organization operates to achieve break even on investments from foreign shores and also generate profits on the long run.Long-term profit objectives long term strategic plan and opportunitiesWhile entering in the United Kingdom, Caf Coffee Day can use different entry modes for its all business divisions. rail ExportDirect exporting means that the Caf Coffee Day would produce FMCG products in India and then divest into a foreign venture thereby exporting it to the new found market i.e. (UK) customer without involving intercessor parties. T he parent company Amalgamated Bean Coffee Trading Company Ltd is one of the biggest exporters of green coffee from India since 1999. The company having expertise in export, it will help Caf Coffee Day to send overseas its FMCG products like Coffee day, Caf Beat.AdvantagesIts sellers responsibility to find customers, negotiate with them and process their orders.Seller maintains complete control by selling through his own export department and gross revenue forceIt helps to build up clear mien in the marketDisadvantagesTransportation cost will be highDependency on purchaser (Porters 5 forces Bargaining power of Buyer )It might creates lack of control over marketing and sales by delegating to agentsFranchisingCaf Coffee Day can consider Franchising for its Caf Coffee Day express and lallygag which would mean that CCD is ready to grant the rights to use the multitude of marketing avenues like brand usage, trademarks and usage of products, and a franchisee mode of operation is put in place to make the local entities run the operations under the banner of CCD.AdvantagesIt can generate franchise feeIt creates Opportunities to build a broadermarket operationDisadvantagesIt may create quality control and protecting brand equity problemWholly-owned SubsidiariesCaf Coffee Day can also be concerned about wholly-owned Subsidiaries for express and lounge division. One of the most expensive methods of market entry is using wholly owned marcher. It requires long term commitment from the management and resources (Doole and Lowe, 2008, P. 250). This entry method can facilitate Caf Coffee Day plans to create the big global chain by 2012-13, at the time of entering in the UK will send clear message about the companys agenda.AdvantagesWholly own subsidiary will serve control of core competency and manufacturing method to a competitorThe entry mode will assist to realize learning curve and location economiesDisadvantagesThe entry mode will make CCD to bear full cost of establis hing its own subsidiaryCaf Coffee Day needs to study British floriculture, consumers and competitionsCaf Coffee Day will have to face UK politics and lawsSales SubsidiariesCaf Coffee Day can think about sales subsidiaries while selling its coffee vending machines in the United Kingdom. Sales subsidiaries play no role in manufacturing the products apart from taking accountability for marketing, selling and distributing it (Brassington Pettit, 2006, P. 1138).AdvantagesCCD can code local as well as transfer staff from IndiaIt can build up minginess to the customerTransferred staff can have good expertise in the product and management companionshipRecruiting local staff will help CCD to acquire local contacts and knowledgeDisadvantagesCCD needs to give product and management training to local staffTransportation cost of vending machine can be highTransferred staff needs local knowledge and contacts, and expatriates cost can be highManufacturing SubsidiariesCCD can also deliberate t o establish manufacturing subsidiaries to reduce the import tariff. They can accumulate existing products in the local market or developing better products as per requirements (Brassington Pettit, 2006, P. 1139).AdvantagesUK government is keen to attract inward investment, it can offer incentives and grants to set up in key regionThis entry mode for CCD helps to reduce conveyance cost in addition to CCD can export the machines to other European countries.DisadvantagesThis kind of operation needs to start from scratch or acquire manufacturing unitCCD needs to calculate long-term plan in the first place investing resourcesRecommendationsWhile considering Caf Coffee Day, its Business divisions and the United Kingdom as a potential European market I would like to present some recommendations.While studying marketing i come to know that there is no immediate or best solution for entering into a foreign market.Caf Coffee Day should calculate all the facts and figures regarding United K ingdom.Caf Coffee Day needs to consider franchising, direct export, wholly-owned subsidiaries, sales and manufacturing subsidiaries with their pros and cons.World Banks reports for doing business in the United Kingdom is positive but as a new foreign company in the market, Caf Coffee Day should consider to go with low investment and long term strategic goals.Caf Coffee Day must consider all the regulations, international laws, and culture and target customers in addition to existing competitors as well.